Tokyo down as Topix nears 17-year low


Japan's banks suffered again -- this time due to problems overseas, with Kmart's failure finding its way to Tokyo trade

TOKYO, Japan -- Asia's main stock markets moved lower on Wednesday, with Tokyo and Hong Kong ending down.

Japan's Topix index fell to its lowest close in almost 17 years. Japanese bank stocks suffered again, this time from the fallout over Kmart's bankruptcy.

The Topix index, which measures all of the stocks on Tokyo's first section, dropped 1.01 percent to 975.20.

The Nikkei 225 index edged back toward 10,000 again, ending down 0.10 percent at 10,040.91.

Australian stocks closed flat. But there were losses across the Tasman in New Zealand, and Taiwan's cabinet-shuffle run came to an end.

There were big gains in South Korea, however. Stocks were also trading up in Singapore and in India on Wednesday afternoon.

Japan banks bruised by Kmart

In Tokyo, the Topix ended at its lowest since May 17, 1985. Mizuho Holdings, the world's biggest bank by assets, slipped 3.66 percent to 263,000 yen.

Sumitomo Mitsui Banking Corp., Japan's No. 2 group, fell 2.70 percent to 505 yen.

Mizuho had about $35 million in outstanding loans to Kmart, while Sumitomo Mitsui had $37 million, according to a filing.

Kmart on Tuesday became the biggest U.S. retailer to file for bankruptcy, prompting a fall in U.S. stocks.

The Dow Jones industrial average slid 0.59 percent, to 9,713.80. Nasdaq fell even further, down 2.48 percent, to 1,882.53, a two-month closing low.

That spilled over into Asian trade, where banks were already suffering the impact of skepticism over handling problem loans.

Japanese retailer Daiei Inc. was the flipside of Kmart last Friday, landing a $3.2 billion bailout from three banks in an effort to keep it from bankruptcy.

The yen stabilized on Wednesday but is still around a three-year weak level against the dollar, at 133.79 in early European trade.

Another scandal has erupted in Japan that involves the Snow Brand.

Snow Brand Food Co. admitted Wednesday that it disguised Australian beef as Japanese, to claim subsidies.

The Japanese government agreed to buy domestic beef after the discovery of mad-cow disease in the country left a glut on the market.

Snow Brand Food plummeted 21.74 percent to 72 yen, as its president confirmed the deception.

Parent Snow Brand Milk Products Co. fell 21.88 percent to 175 yen, despite efforts to limit the fallout to the food subsidiary.

The company is still recovering from a tainted-milk scandal in 2000 that left 14,000 people ill.

Korea up on big-stock optimism

In Seoul, South Korea's Kospi index again gave joy to Asian bulls. It climbed 2.5 percent, ending at 742.62.

Many of the favorites of overseas funds were up. Pohang Iron and Steel Corp. rose 5.2 percent to 131,000 won.

Samsung Electronics, the largest listing, climbed 2.7 percent to 308,000 won. SK Telecom, the country's largest cell-phone operator, jumped 3.05 percent to 253,00 won.

The country's relatively strong economic fundamentals have again been attracting investors to Korea's market.

Taiwan, a similarly chip-driven market, fell 0.59 percent to leave the Taiex at 5,769.78.

The electronics subindex fell 0.87 percent. Taiwan's stocks had rallied sharply for the prior two days after a government shakeup.

Memory chipmaker Winbond Electronics fell 3.9 percent to T$24.80 as that run ended.

Kmart also dealt Taiwan a knock, where it has several suppliers.

Australia flat as it weighs News fall

Australia's S&P/ASX 200 index was basically flat, up 0.01 percent to 3,422.0.

News Corp. was down 1.3 percent to A$13.94. But mining stocks offset that weakness in Sydney's largest listing.

Rio Tinto rose 0.3 percent to A$37.16 as it reported earnings that were in line with expectations. Fellow resources giant BHP Billiton climbed 0.3 percent to A$11.18.

Bionic-ear maker Cochlear Corp. fell close to 2 percent to A$42.15.

In New Zealand, the NZSE-40 index fell 0.6 percent to 2,101.51 on losses in some of its largest names.

The largest, Telecom New Zealand, weighed heavily with a 1.7 percent fall to NZ$5.29.

Fisher & Paykel Healthcare dropped 4.8 percent to NZ$15.95 on worries about increased competition.

China Mobile lower again in Hong Kong

Hong Kong's Hang Seng suffered to the tune of 0.33 percent, down to 10,762.14.

China Mobile was off sharply for a second day, 2.21 percent lower to HK$22.05.

The losses were steeper earlier in the day. But U.S.-oriented companies like trader Li & Fung and small-motor maker Johnson Electric reversed their Kmart-induced drops.

Li & Fung closed particularly strong, up 3.02 percent to HK$10.35.

China's markets ended a choppy trading day up 4.3 percent in Shanghai and 6.5 percent in Shenzhen.

Singapore's Straits Times index was up 0.17 percent at 1,665.98 in the last hour of trade, shaking off early U.S.-oriented weakness.

Indian stocks were back from Tuesday's jitters, the main Mumbai index up 0.33 percent in early afternoon.

Reuters contributed to this report.